Assessing global potential output growth: April 2024 Staff analytical note 2024-10 Amor Aniss Benmoussa, Raheeb Dastagir, Eshini Ekanayake, Justin-Damien Guénette, Helen Lao, Jenna Rolland-Mills, Aidan Spencer, Lin Xiang This note presents the annual update of Bank of Canada staff estimates for growth in global potential output. These estimates serve as key inputs to the analysis supporting the April 2024 Monetary Policy Report. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E1, E2, F, F0, O, O4 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply, Digitalization and productivity
Market Concentration and Uniform Pricing: Evidence from Bank Mergers Staff working paper 2021-9 João Granja, Nuno Paixão We show that US banks price deposits almost uniformly across their branches and that this pricing practice is more important than increases in local market concentration in explaining the deposit rate dynamics following bank mergers. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D4, G, G2, G20, G21, G28, G3, G34, L, L1, L11 Research Theme(s): Financial markets and funds management, Market structure, Financial system, Financial institutions and intermediation, Financial stability and systemic risk
The Macroeconomic Implications of Coholding Staff working paper 2024-16 Michael Boutros, Andrej Mijakovic Coholder households simultaneously carry high-cost credit card debt and low-yield cash. We study the implications of this behavior for fiscal and monetary policy, finding that coholder households have smaller consumption responses in the short run but larger responses in the long run. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E21, E4, E44, E6, E62, G, G5, G51 Research Theme(s): Financial system, Household and business credit, Models and tools, Economic models, Monetary policy, Real economy and forecasting
June 13, 2024 Exceptional policies for an exceptional time: From quantitative easing to quantitative tightening Remarks Sharon Kozicki Canadian Association of Business Economics Ottawa, Ontario Deputy Governor Sharon Kozicki discusses the use of exceptional monetary policy tools during the COVID-19 pandemic, as well as the Bank’s commitment to transparency and accountability. Content Type(s): Press, Speeches and appearances, Remarks
Global Demand and Supply Sentiment: Evidence from Earnings Calls Staff working paper 2023-37 Temel Taskin, Franz Ulrich Ruch This paper quantifies global demand, supply and uncertainty shocks and compares two major global recessions: the 2008–09 Great Recession and the COVID-19 pandemic. We use two alternate approaches to decompose economic shocks: text mining techniques on earnings calls transcripts and a structural Bayesian vector autoregression model. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C1, C11, C3, C32, E, E3, E32, G, G1, G10 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
Financial Crisis Interventions Staff working paper 2016-29 Josef Schroth This paper develops a model of an economy where bank credit supports both productive investment and individual consumption smoothing in the face of idiosyncratic income risk. Bank credit is constrained by bank equity capital. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E1, E13, E3, E32, E4, E44 Research Theme(s): Financial system, Financial stability and systemic risk, Financial system regulation and oversight, Household and business credit
March 9, 2010 Inflation Expectations and the Conduct of Monetary Policy: A Review of Recent Evidence and Experience Bank of Canada Review - Spring 2010 Rose Cunningham, Brigitte Desroches, Eric Santor This article explores the role of inflation expectations in the conduct of monetary policy. It reviews the various measures of inflation expectations used by central banks, including surveys and market-based indicators, and considers their advantages and disadvantages. It examines the critical role of inflation expectations in the framework that central banks use to understand, forecast, and control inflation. It also looks at their role as an indicator of central bank credibility. The behaviour of inflation expectations over the past two years is analyzed and policy conclusions are offered. Content Type(s): Publications, Bank of Canada Review articles
The Optimum Quantity of Central Bank Reserves Staff working paper 2025-15 Jonathan Witmer This paper analyzes the optimal quantity of central bank reserves in an economy where reserves and other financial assets provide liquidity benefits. Using a static model, I derive a constrained Friedman rule that characterizes the socially optimal level of reserves, demonstrating that this quantity is neither necessarily large nor small but depends on the marginal benefits of reserves relative to alternative safe assets. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E41, E42, E5, E58, G, G2, G21, G28 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial institutions and intermediation, Monetary policy, Monetary policy tools and implementation
Making It Real: Bringing Research Models into Central Bank Projections Staff discussion paper 2023-29 Marc-André Gosselin, Sharon Kozicki Macroeconomic projections and risk analyses play an important role in guiding monetary policy decisions. Models are integral to this process. This paper discusses how the Bank of Canada brings research models and lessons learned from those models into the central bank projection environment. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C3, C32, C5, C51, E, E3, E37, E4, E47, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting